Date: Jul 29, 2026

Royce v. State Farm: Umbrella UIM Waiver Does Not Carry Forward to Later Coverage Increases Under the 1991 RSA 264:15, I

Introduction

In Royce v. State Farm Fire & Cas. Co., 2026 N.H. 28 (N.H. July 24, 2026), the New Hampshire Supreme Court addressed a recurring umbrella-policy question: when a named insured initially rejects uninsured/underinsured motorist (UIM) coverage for an umbrella policy, does that rejection also waive UIM coverage when the insured later increases the umbrella liability limit?

The plaintiff, Susan D. Royce, was injured as a passenger in a vehicle insured under her sister Katherine Royce’s State Farm umbrella policy. After settling with the underinsured tortfeasor, she sought UIM benefits under the umbrella. State Farm denied coverage based on Katherine’s UIM rejection signed on the original 2000 umbrella application. The case turned on interpretation of the 1991 version of RSA 264:15, I—specifically, what triggers the statute’s automatic UIM-equal-to-liability mandate for umbrella/excess policies and how far an earlier rejection extends.

Summary of the Opinion

The Court reversed summary judgment for State Farm and held:

Katherine’s November 2001 request to raise the umbrella liability limit from $1 million to $5 million was a new “elect[ion] to purchase liability insurance” under RSA 264:15, I, triggering automatic UIM coverage equal to the additional $4 million unless rejected at that time.
Because Katherine did not execute a new rejection when she purchased the $4 million increase, $4 million of UIM coverage existed at the time of the 2021 accident.
Routine renewals of the original $1 million umbrella limit were “administrative in nature” and did not constitute a new “elect[ion] to purchase” insurance; thus, the original 2000 UIM rejection remained effective as to that initial $1 million.

The case was remanded for entry of a declaratory judgment consistent with these holdings.

Analysis

Precedents Cited

Standards of Review and Burdens

O'Malley-Joyce v. Travelers Home & Marine Ins. Co., 175 N.H. 245 (2022): Used for the summary-judgment standard (“no genuine issue as to any material fact” and entitlement to judgment as a matter of law).
Boyle v. City of Portsmouth, 172 N.H. 781 (2020): Reinforced how appellate review treats cross-motions for summary judgment (evidence viewed favorably to each nonmovant) and that legal application is reviewed de novo.
CC 145 Main v. Union Mut. Fire Ins. Co., 176 N.H. 97 (2023): Supplied a key insurance-coverage procedural rule in declaratory actions: the insurer bears the burden of proving lack of coverage “regardless of which party brings the petition.”

Statutory Interpretation Framework

Appeal of Town of Salem, 168 N.H. 572 (2016): Cited for the principle that statutory interpretation is reviewed de novo.
Boucher v. Town of Moultonborough, 176 N.H. 271 (2023): The Court relied heavily on this decision’s canons: plain meaning first; give effect to every word; do not add language; construe provisions together to effectuate statutory purpose and avoid absurd results; read in harmony with the broader statutory scheme. These canons were decisive in rejecting the trial court’s policy-focused gloss on “elects to purchase.”

The UIM Mandate’s Purpose and Liberal Construction

Rizzo v. Allstate Ins. Co., 170 N.H. 708 (2018): Quoted for the UIM statute’s purpose—placing insured persons in the same position they would have occupied if the tortfeasor had comparable liability coverage.
Rivera v. Liberty Mut. Fire Ins. Co., 163 N.H. 603 (2012): Supported liberal construction of the UIM mandate to fulfill compensatory goals, particularly where inadequate liability insurance would leave victims undercompensated.

Elective Coverage Provision and Umbrella Policies

Swain v. Employers Mut. Cas. Co., 150 N.H. 574 (2004): Explained the “elective coverage provision” concept—allowing policyholders to protect themselves against uninsured drivers to the same extent they protect against liability to others. The Court used this to frame the statutory mechanism that ties UIM to chosen liability limits.
O'Donnell v. Allstate Indem. Co., 173 N.H. 295 (2020): Cited for the proposition that RSA 264:15, I expressly extends equivalent-coverage requirements to umbrella policies absent rejection. The Court then distinguished O'Donnell because it construed a later statutory version that expressly made rejections effective upon “policy amendment or renewal”—language absent from the governing 1991 statute.
U.S. Automobile Assoc. v. Wilkinson, 132 N.H. 439 (1989): State Farm relied on this to argue umbrella policies fall outside the first sentence’s “elective coverage” trigger. The Court rejected that reliance because Wilkinson construed an earlier statute; the legislature amended RSA 264:15, I in 1991 after Wilkinson, adding umbrella/excess policies to the paragraph.
Santos v. Metro. Prop. & Cas. Ins. Co., 171 N.H. 682 (2019): Served two roles: (1) explaining Wilkinson’s historical context and how the 1991 amendment responded to it; and (2) reaffirming that private insurance contract terms cannot limit coverage in contravention of RSA chapter 264—a point used to neutralize application-form language purporting to extend a rejection until a written request to add coverage.

Defining “Elects to Purchase” by Ordinary Meaning

Appeal of Port City Air Leasing, Inc., 177 N.H. 149 (2024), 2024 N.H. 71, ¶10: Provided the method for undefined statutory terms: consult common usage and dictionaries. The Court then used Oxford English Dictionary definitions of “elect,” “purchase,” and “insurance” to conclude that increasing policy limits (with a recalculated premium) is a “purchase” of additional insurance.

Secondary Authority on Rejection/Waiver

9 Steven Plitt et al., Couch on Insurance 3d § 122:39 (rev. ed. 2015): Used to support strict construction of statutory rejection provisions “against waiver,” reflecting strong public policy favoring uninsured motorist coverage. This buttressed the Court’s reading that a new purchase requires a new rejection.

Legal Reasoning

1) The 1991 statutory text ties umbrella UIM to the same trigger as auto policies: “elect[ing] to purchase” higher liability limits

The Court treated RSA 264:15, I (1991) as a single integrated paragraph. The second sentence—beginning “[f]or the purposes of this paragraph umbrella or excess policies…” and using the word “also”—was read not as a freestanding rule with its own trigger, but as an incorporation of umbrella policies into the paragraph’s existing mechanics. Because the umbrella sentence lacks an independent triggering event, the Court inferred the trigger must be the same as the prior sentence: when the insured “elects to purchase liability insurance” above the minimum, UIM “shall automatically be equal” to that elected liability amount unless rejected.

2) Increasing limits is a new “purchase” of insurance under ordinary meaning

Applying plain-language interpretation (via dictionary definitions), the Court reasoned that Katherine’s voluntary request to increase limits to $5 million—followed by a recalculated premium proportioned to increased risk—was a deliberate choice to obtain additional protection from pecuniary loss. That is a “purchase” of insurance, even if accomplished through an endorsement/amendment rather than issuance of a brand-new policy.

3) The trial court’s “new policy” requirement improperly added words to the statute

The lower court had equated “elects to purchase” with choosing to obtain a policy of insurance. The Supreme Court rejected that as an impermissible addition: the statute speaks of purchasing “insurance,” not purchasing a “policy.” Under the Court’s reading, a purchase can occur either via a new policy or by obtaining additional coverage under an existing policy.

4) Distinguishing later statutory amendments (and O'Donnell)

A key move in the opinion is temporal: the Court emphasized that the governing 1991 version did not address “policy amendment or renewal,” unlike the later version applied in O'Donnell. Therefore, whether the limit increase was merely an “amendment” did not resolve the question; instead, the operative inquiry remained whether the insured “elect[ed] to purchase” additional insurance.

5) Contract language cannot displace statutory mandatory-coverage rules

State Farm’s application stated that the rejection applied to the initial policy, “all future renewals,” and “all replacement policies until” written request to add coverage. The Court held that even if such terms are contractually clear, they cannot override RSA chapter 264’s mandatory-coverage requirements. Thus, after the insured purchased more umbrella insurance, the statute required automatic UIM equal to that additional liability unless the insured rejected it at the time of purchase.

6) Renewals are not new elections to purchase (for the original $1 million)

On the renewals issue, the Court focused on the word “elects,” reasoning that routine renewals do not reflect a meaningful “deliberate choice” to obtain coverage anew; they maintain existing protection and are “administrative in nature.” As a result, the initial rejection remained effective for the original $1 million limits across renewals.

Impact

Limit increases in umbrella policies are high-stakes “purchase events” under the 1991 statute. Insurers writing umbrella/excess coverage governed by the 1991 RSA 264:15, I should treat increases as requiring a fresh, contemporaneous UIM rejection if they intend to avoid automatic UIM attaching to the increased portion.
Partial UIM outcomes are now clearly doctrinally supported. The Court effectively “segmented” the umbrella limit: the original $1 million remained waived, while the additional $4 million became UIM-covered by operation of law. Future litigants can expect courts to parse coverage changes rather than treat waiver as all-or-nothing.
Renewal alone does not reset the “election” trigger. For policies under the 1991 language, claimants may face difficulty arguing that annual renewals revive the statutory offer/automatic-attachment obligation absent some affirmative elective act (like increasing limits).
Form language extending rejection “until written request” has limited power. Even explicit “evergreen” rejection language will not defeat statutory automatic coverage when the insured later elects to buy more insurance without rejecting UIM at that time.
Litigation and compliance will turn on characterization of midterm changes. Disputes may focus on whether a given change is merely administrative (e.g., changing vehicles/drivers) or constitutes a new purchase of additional insurance (e.g., increased limits, added layers, expanded risks with premium changes).

Complex Concepts Simplified

Uninsured/Underinsured Motorist (UIM) Coverage: Coverage that pays an insured when the at-fault driver has no insurance or not enough insurance to cover the insured’s damages, up to the insured’s own UIM limits.
Umbrella (or Excess) Policy: A liability policy providing higher “extra” limits above underlying auto/home policies. RSA 264:15, I treats such policies as required to provide UIM equal to the umbrella limits unless the named insured rejects it.
“Elective Coverage Provision”: The rule that when an insured chooses (elects) liability limits above the statutory minimum, UIM automatically matches that chosen level—subject, for umbrella policies, to a right of rejection.
Rejection/Waiver of UIM: A named insured’s decision not to buy UIM coverage otherwise required to be provided. Courts often construe waivers narrowly because UIM statutes reflect strong public policy.
Renewal vs. Purchase of Additional Insurance: A renewal continues existing coverage for another term; under Royce, that continuation is not itself a new “election” to purchase. By contrast, increasing limits is treated as obtaining additional insurance—i.e., a new purchase—triggering the statutory automatic-coverage rule unless rejected then.
Declaratory Judgment: A court order declaring the parties’ rights/obligations under a statute or contract (here, whether UIM coverage exists and in what amount).
Summary Judgment: A pretrial decision when there are no genuine disputes of material fact and the case can be decided as a matter of law.

Conclusion

Royce establishes a practical rule for umbrella policies governed by the 1991 RSA 264:15, I: an initial umbrella UIM rejection remains effective for the originally purchased limits across routine renewals, but it does not automatically extend to later increases in umbrella liability limits. A limits increase is a fresh “elect[ion] to purchase” additional insurance and triggers automatic UIM equal to the increased amount unless the named insured rejects UIM at the time of that increase. The decision reinforces New Hampshire’s pro-coverage UIM policy while anchoring outcomes to textual, plain-meaning statutory interpretation and to the principle that insurers cannot contract around mandatory coverage.